Company Registration No. 02052714 (England and Wales)
BRIGHTWELLS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
BRIGHTWELLS LIMITED
COMPANY INFORMATION
Directors
RJ Binnersley
NWE Gorst
TI Parry
RA Bound
Secretary
G P M Fitzgerald
Company number
02052714
Registered office
Easters Court
Leominster
Herefordshire
HR6 0DE
Auditor
UHY Hacker Young
14 Park Row
Nottingham
NG1 6GR
Bankers
Barclays Bank PLC
Herefordshire Business Centre
1-3 Broad Street
Hereford
HR4 9BH
BRIGHTWELLS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10 - 11
Statement of changes in equity
12 - 13
Statement of cash flows
14
Notes to the financial statements
15 - 34
BRIGHTWELLS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
The directors believe that the results for 201
9
represent a strong trading performance in the current economic climate and are pleased to report reasonable growth in sales revenues over the previous year. The increase in revenues resulted in achieving a steady overall profit and it is anticipated that this performance will be sustained.
Principal risks and uncertainties
The
di
rectors consider that the main financial risks to the business lie in the areas of interest rates, liquidity, pricing and foreign exchange.
The company has little or no interest rate risk. The sole means by which interest rate risk might occur is the cost of any banking facility the company uses. The available facility has not been used in recent years.
The company continues to have considerable financial resources, along with an available banking facility, rarely used, and a totally unencumbered asset base. Current projections give every indication that the company will continue to perform in a financially positive way and the directors are therefore strongly of the view that liquidity offers very low risk to the business.
The company's exposure to price risk is low. Earnings are a fixed percentage of the value of goods auctioned and the value of goods remains stable.
The company transacts very little business in foreign currency and where this does occur the risk is mitigated by utilizing the services of a specialist trading company and maintaining foreign currency accounts. The directors recognize that there is always an element of risk present because the nature of such transactions is that the timing thereof is not readily predictable.
COVID-19 has initially disrupted the operations of the business from March 2020, however all appropriate measures have now been put in place to reduce the ongoing impact on the business.
Development and performance
The directors believe that the results for 201
9
represent a strong trading performance in the current economic climate and are pleased to report reasonable growth in sales revenues over the previous year. The increase in revenues resulted in achieving a steady overall profit and it is anticipated that this performance will be sustained.
BRIGHTWELLS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Key performance indicators
The 201
9
figures again show that the company has succeeded in managing the risks associated with economic downturn.
The outcome for 201
9
from continuing operations is summari
s
ed as follows: increased gross turnover levels
from
£
8
m
to
£
9
m (+
11
%); a
n increase
in gross profit as a percentage of turnover (
39
% in 201
8
compared to
40
% in 201
9
); and a
decrease
in pre tax profit as a percentage of gross turnover
from
14.6
% in 201
8
to
12.1% in 2019.
G P M Fitzgerald
Secretary
17 December 2020
BRIGHTWELLS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company continued to be that of auctioneers and valuers.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
RJ Binnersley
NWE Gorst
TI Parry
RA Bound
Results and dividends
The results for the year are set out on page 8.
During the year the company paid dividends of £nil (2018: £66,938).
Auditor
In accordance with the company's articles, a resolution proposing that UHY Hacker Young be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
By order of the board
G P M Fitzgerald
Secretary
17 December 2020
BRIGHTWELLS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BRIGHTWELLS LIMITED
- 5 -
Opinion
We have audited the financial statements of Brightwells Limited (the 'company') for the year ended 31 December 2019 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BRIGHTWELLS LIMITED
- 6 -
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BRIGHTWELLS LIMITED
- 7 -
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Roger Merchant (Senior Statutory Auditor)
for and on behalf of UHY Hacker Young
21 December 2020
Chartered Accountants
Statutory Auditor
BRIGHTWELLS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
9,006,277
8,042,935
Cost of sales
(5,908,413)
(4,934,201)
Gross profit
3,097,864
3,108,734
Administrative expenses
(3,220,423)
(2,972,428)
Other operating income
953,795
803,304
Operating profit
4
831,236
939,610
Interest receivable and similar income
7
284,345
235,947
Interest payable and similar expenses
8
(29,473)
-
Profit before taxation
1,086,108
1,175,557
Tax on profit
9
(200,930)
(192,314)
Profit for the financial year
885,178
983,243
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BRIGHTWELLS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 9 -
2019
2018
£
£
Profit for the year
885,178
983,243
Other comprehensive income
Actuarial (loss)/gain on defined benefit pension schemes
(1,173,000)
165,000
Deferred tax relating to defined benefit pension scheme
180,690
(49,640)
Other comprehensive income for the year
(992,310)
115,360
Total comprehensive income for the year
(107,132)
1,098,603
BRIGHTWELLS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2019
31 December 2019
- 10 -
2019
2018
Notes
£
£
£
£
Fixed assets
Intangible assets
11
3
1,141
Tangible assets
12
4,016,899
4,004,350
Investment properties
13
4,980,413
2,575,054
Investments
14
1,090
1,090
8,998,405
6,581,635
Current assets
Stocks
16
2,976
4,892
Debtors
17
2,081,605
2,203,214
Cash at bank and in hand
1,206,388
851,198
3,290,969
3,059,304
Creditors: amounts falling due within one year
18
(3,687,691)
(2,365,951)
Net current (liabilities)/assets
(396,722)
693,353
Total assets less current liabilities
8,601,683
7,274,988
Creditors: amounts falling due after more than one year
19
(1,287,097)
-
Provisions for liabilities
20
-
(45,220)
Net assets excluding pension (liability)/surplus
7,314,586
7,229,768
Defined benefit pension (liability)/surplus
21
(713,000)
292,000
Net assets
6,601,586
7,521,768
Capital and reserves
Called up share capital
22
1,950
1,950
Share premium account
23
503,902
503,902
Capital redemption reserve
23
211
211
Own shares
23
(3,213,925)
(2,400,875)
Profit and loss reserves
23
9,309,448
9,416,580
Total equity
6,601,586
7,521,768
BRIGHTWELLS LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2019
31 December 2019
- 11 -
The financial statements were approved by the board of directors and authorised for issue on 17 December 2020 and are signed on its behalf by:
NWE Gorst
Director
Company Registration No. 02052714
BRIGHTWELLS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 12 -
Share capital
Share premium account
Capital redemption reserve
Treasury reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2018
1,950
503,902
211
(443,375)
8,384,915
8,447,603
Year ended 31 December 2018:
Profit for the year
-
-
-
-
983,243
983,243
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
-
165,000
165,000
Tax relating to pension
-
-
-
-
(49,640)
(49,640)
Total comprehensive income for the year
-
-
-
-
1,098,603
1,098,603
Dividends
10
-
-
-
-
(66,938)
(66,938)
Other movements
-
-
-
(1,957,500)
-
(1,957,500)
Balance at 31 December 2018
1,950
503,902
211
(2,400,875)
9,416,580
7,521,768
BRIGHTWELLS LIMITED
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
Share capital
Share premium account
Capital redemption reserve
Treasury reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
- 13 -
Year ended 31 December 2019:
Profit for the year
-
-
-
-
885,178
885,178
Other comprehensive income:
Actuarial losses on defined benefit plans
-
-
-
-
(1,173,000)
(1,173,000)
Tax relating to pension
-
-
-
-
180,690
180,690
Total comprehensive income for the year
-
-
-
-
(107,132)
(107,132)
Other movements
-
-
-
(813,050)
-
(813,050)
Balance at 31 December 2019
1,950
503,902
211
(3,213,925)
9,309,448
6,601,586
BRIGHTWELLS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 14 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
2,242,818
1,209,796
Interest paid
(29,473)
-
Income taxes paid
(220,541)
(238,185)
Net cash inflow from operating activities
1,992,804
971,611
Investing activities
Purchase of tangible fixed assets
(145,209)
(318,664)
Proceeds on disposal of tangible fixed assets
26,750
2,300
Purchase of investment property
(2,405,359)
-
Interest received
19,304
27,547
Other investment income received
255,041
206,400
Net cash used in investing activities
(2,249,473)
(82,417)
Financing activities
Purchase of own shares
(813,050)
(1,957,500)
Receipt of new bank loans
1,500,000
-
Bank loan repayments
(75,091)
-
Dividends paid
-
(66,938)
Net cash generated from/(used in) financing activities
611,859
(2,024,438)
Net increase/(decrease) in cash and cash equivalents
355,190
(1,135,244)
Cash and cash equivalents at beginning of year
851,198
1,986,442
Cash and cash equivalents at end of year
1,206,388
851,198
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 15 -
1
Accounting policies
Company information
Brightwells Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Easters Court, Leominster, Herefordshire, HR6 0DE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China. In the first months of 2020, the virus, SARS-CoV-2, and resulting disease COVID-19, spread to the United Kingdom.
true
The resulting actions in the UK taken by the government to control the pandemic initially impacted on operations.
All appropriate measures have now been put in place to reduce the ongoing impact on the business.
The directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
Revenue represents auction commissions receivable by the company and amounts chargeable to clients for professional services provided during the year.
Auction commissions receivable are recognised on the day of the auction.
Revenue from the sale of catalogues is recognised when the catalogues are dispatched. Revenue from the provision of services is recognised on the completion of services.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 16 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Intellectual property
3-5 years straight line
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
5% straight line
Fixtures and fittings
10%, 14%, 20% and 33% straight line
Motor vehicles
20% and 33% straight line
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
Changes in fair value are recognised in profit or loss.
1.7
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 17 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 18 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity
.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Retirement benefits
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 19 -
The
net
defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives as set out in the accounting policies. the selection of these estimated lives requires the exercise of management judgement. Useful lives are regularly reviewed and should managements assessment of useful lives shorten then depreciation charges in the financial statements would increase and the carrying amounts of property, plant and equipment would reduce accordingly, The carrying amount of property, plant and equipment by each class is included in note 12.
Investment property is carried at fair value. The directors are satisfied that the fair value is consistent with cost taking into account current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset if considered necessary.
The directors have taken independent advice from a qualified actuary in relation to the assumptions applied in estimating the liability arising from the defined benefit pension scheme. Details of the assumptions are given in note 21.
The estimates and assumptions used to assess the recoverability of trade debtors consist of the payments received against balances and payment history. The carrying amount in trade debtors is included in note 17.
3
Turnover and other revenue
2019
2018
£
£
Turnover analysed by class of business
Commissions receivable
9,006,277
8,042,936
2019
2018
£
£
Other significant revenue
Interest income
29,304
29,547
Royalty income
93,033
86,386
Recharges received
79,781
79,640
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
3
Turnover and other revenue
(Continued)
- 21 -
All turnover arose within the United Kingdom.
The overall total value of items sold through the auction house for the year amounted to £84,404,002 (2018: £69,301,322). The company is not the principal in these transactions and, in accordance with its accounting policy, turnover represents auction commissions receivable on these auction sales along with professional services provided during the year stated net of value added tax.
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(4,331)
(4,330)
Fees payable to the company's auditor for the audit of the company's financial statements
11,950
11,950
Depreciation of owned tangible fixed assets
127,046
101,311
Profit on disposal of tangible fixed assets
(21,136)
(1,610)
Amortisation of intangible assets
1,138
15,662
Operating lease charges
224,083
253,313
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Administrative Staff
14
16
Selling Staff
104
111
Total
118
127
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
5
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
4,048,355
3,374,265
Social security costs
388,248
247,270
Pension costs
161,772
137,618
4,598,375
3,759,153
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
663,616
512,407
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 3 (2018 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid directors:
2019
2018
£
£
Remuneration for qualifying services
280,460
188,118
Company pension contributions to defined contribution schemes
7,810
6,520
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 23 -
7
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
19,304
27,547
Interest on the net defined benefit asset
10,000
2,000
Total interest revenue
29,304
29,547
Income from fixed asset investments
Income from other fixed asset investments
255,041
206,400
Total income
284,345
235,947
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
19,304
27,547
8
Interest payable and similar expenses
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
29,473
-
9
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
204,229
192,314
Adjustments in respect of prior periods
(3,299)
-
Total current tax
200,930
192,314
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
9
Taxation
(Continued)
- 24 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit before taxation
1,086,108
1,175,557
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
206,361
223,356
Adjustments in respect of prior years
24,589
(2,352)
Defined benefit pension scheme
(30,020)
(28,690)
Taxation charge for the year
200,930
192,314
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2019
2018
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
(180,690)
49,640
10
Dividends
2019
2018
£
£
Final paid
-
66,938
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 25 -
11
Intangible fixed assets
Intellectual property
£
Cost
At 1 January 2019 and 31 December 2019
343,340
Amortisation and impairment
At 1 January 2019
342,199
Amortisation charged for the year
1,138
At 31 December 2019
343,337
Carrying amount
At 31 December 2019
3
At 31 December 2018
1,141
12
Tangible fixed assets
Freehold buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2019
4,185,846
629,249
105,800
4,920,895
Additions
-
129,842
15,367
145,209
Disposals
-
(35,250)
(2,900)
(38,150)
At 31 December 2019
4,185,846
723,841
118,267
5,027,954
Depreciation and impairment
At 1 January 2019
382,056
482,160
52,329
916,545
Depreciation charged in the year
34,289
73,969
18,788
127,046
Eliminated in respect of disposals
-
(30,416)
(2,120)
(32,536)
At 31 December 2019
416,345
525,713
68,997
1,011,055
Carrying amount
At 31 December 2019
3,769,501
198,128
49,270
4,016,899
At 31 December 2018
3,803,790
147,089
53,471
4,004,350
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 26 -
13
Investment property
2019
£
Fair value
At 1 January 2019
2,575,054
Additions through external acquisition
2,405,359
At 31 December 2019
4,980,413
Investment property comprises land and estate in Portsmouth, along with a newly acquired property in Worcestershire. The cost of the Portsmouth property was included for the first time in 2016 at the purchase price of £2,575,054. The Worcestershire property was purchased during the year, at the purchase price of £2,405,359. As at the year ended 31 December 2019, the directors of the company consider that the purchase price of both properties still represents their fair value.
14
Fixed asset investments
2019
2018
£
£
Unlisted investments
1,090
1,090
The company owns shares in Hereford Market Auctioneers Limited (42%) and Farmers First Limited (<10%).
Hereford Market Auctioneers Limited had aggregated share capital and reserves of £496,787 (2018: £492,304). The company's profit for the year was £4,483 (2018: £37,977).
In July 2020, the interest which the company held in Hereford Market Auctioneers Limited was sold for £1,250,000.
15
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,751,636
2,048,657
Instruments measured at fair value through profit or loss
4,981,503
2,576,144
Carrying amount of financial liabilities
Measured at amortised cost
4,434,223
1,824,190
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 27 -
16
Stocks
2019
2018
£
£
Raw materials and consumables
2,976
4,892
17
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
1,613,063
1,783,014
Amounts owed by undertakings in which the company has a participating interest
4,780
115,652
Other debtors
133,793
149,991
Prepayments and accrued income
194,499
154,557
1,946,135
2,203,214
2019
2018
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 20)
135,470
-
Total debtors
2,081,605
2,203,214
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 28 -
18
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans
137,812
-
Trade creditors
282,939
195,613
Corporation tax
134,134
153,745
Other taxation and social security
406,431
388,016
Other creditors
1,238,826
637,044
Accruals and deferred income
1,487,549
991,533
3,687,691
2,365,951
As at the year end the company's bank, being Barclays plc, has a fixed charge over the two investment properties owned by the company, along with standard charges over credit balances.
19
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Bank loans and overdrafts
1,287,097
-
20
Deferred taxation
The deferred tax asset of £135,470 (2018- deferred tax liability £45,220) arising from the defined benefit pension scheme liability is recognised below.
The directors have not recognised the deferred tax liability/asset arsing from the net fixed asset timing differences on the grounds of materiality.
2019
Movements in the year:
£
Liability at 1 January 2019
45,220
Credit to other comprehensive income
(180,690)
Liability/(Asset) at 31 December 2019
(135,470)
The deferred tax asset set out above is expected to reverse in the next 3 years.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 29 -
21
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
55,892
70,618
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
Defined benefit schemes
The company operates a defined benefit scheme for qualifying employees.
Pensions are linked to the members' final pensionable salary and service at their retirement (or date of leaving if earlier). The scheme has been closed to new entrants since 1 August 2000.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out
by Royal London
, Fellow of the Institute of Actuaries
as at 1 August 2017
. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.
2019
2018
Key assumptions
%
%
Discount rate
1.9
2.7
Expected rate of increase of pensions in payment
5
5
Expected rate of salary increases
2
2
Retail price inflation
3.2
3.3
Mortality assumptions
2019
2018
Assumed life expectations on retirement at age 65:
Years
Years
Retiring today
- Males
21.8
21.8
- Females
24.0
23.7
Retiring in 20 years
- Males
23.1
22.8
- Females
25.5
24.9
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
21
Retirement benefit schemes
(Continued)
- 30 -
2019
2018
Amounts recognised in the profit and loss account
£
£
Current service cost
56,000
67,000
Net interest on defined benefit liability/(asset)
(10,000)
(2,000)
Total costs
46,000
65,000
2019
2018
Amounts taken to other comprehensive income
£
£
Actual return on scheme assets
(693,000)
113,000
Less: calculated interest element
246,000
226,000
Return on scheme assets excluding interest income
(447,000)
339,000
Actuarial changes related to obligations
1,620,000
(504,000)
Total costs/(income)
1,173,000
(165,000)
The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:
2019
2018
£
£
Present value of defined benefit obligations
9,645,000
8,954,000
Fair value of plan assets
(8,932,000)
(9,246,000)
Deficit/(surplus) in scheme
713,000
(292,000)
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
21
Retirement benefit schemes
(Continued)
- 31 -
2019
Movements in the present value of defined benefit obligations
£
Liabilities at 1 January 2019
8,954,000
Current service cost
56,000
Benefits paid
(1,240,000)
Contributions from scheme members
19,000
Actuarial gains and losses
1,620,000
Interest cost
236,000
At 31 December 2019
9,645,000
2019
Movements in the fair value of plan assets
£
Fair value of assets at 1 January 2019
9,246,000
Interest income
246,000
Return on plan assets (excluding amounts included in net interest)
447,000
Benefits paid
(1,240,000)
Contributions by the employer
214,000
Contributions by scheme members
19,000
At 31 December 2019
8,932,000
The actual return on plan assets was £693,000 (2018 - £113,000).
22
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
39,000 Ordinary shares of 5p each
1,950
1,950
23
Reserves
Share premium
Amounts subscribed for share capital in excess of nominal value.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
23
Reserves
(Continued)
- 32 -
Capital redemption reserve
An amount of money that a company in the UK must keep when it buys back shares, and which it cannot pay to shareholders as dividends.
Treasury reserve
During the year the company had purchases of 5,050 shares into the treasury for £813,050.
Profit and loss account
This comprises of opening retained earnings, the profit or loss for the year and dividends paid as set out in the statement of changes in equity.
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019
2018
£
£
Within one year
91,125
16,157
Between two and five years
218,936
80,952
310,061
97,109
25
Capital commitments
Amounts contracted for but not provided in the financial statements:
2019
2018
£
£
Acquisition of tangible fixed assets
102,590
-
26
Related party transactions
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly. Key management personnel consists of the board of directors. Directors remuneration is disclosed as per note 6.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
26
Related party transactions
(Continued)
- 33 -
Transactions with related parties
During the year the company supplied services to the value of £264,582 (2018 - £115,652) to Hereford Market Auctioneers Limited, an associated company undertaking. The services were supplied at open market value. Brightwells Limited was owed £4,780 (2018 - £115,652) at the year end. All of this debtor relates to trading balances and is disclosed as amounts due from undertakings in which the company has a participating interest.
Since the reporting date, the company has disposed of its investment in Hereford Market Auctioneers Limited to a third party.
27
Directors' transactions
Dividends totalling £0 (2018 - £66,938) were paid in the year in respect of shares held by the company's directors.
BRIGHTWELLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 34 -
28
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
885,178
983,243
Adjustments for:
Taxation charged
200,930
192,314
Finance costs
29,473
-
Investment income
(284,345)
(235,947)
Gain on disposal of tangible fixed assets
(21,136)
(1,610)
Amortisation and impairment of intangible assets
1,138
15,662
Depreciation and impairment of tangible fixed assets
127,046
101,311
Pension scheme cash movement in excess of charge
(158,000)
(157,960)
Movements in working capital:
Decrease/(increase) in stocks
1,916
(1,572)
Decrease/(increase) in debtors
257,079
(313,929)
Increase in creditors
1,203,539
628,284
Cash generated from operations
2,242,818
1,209,796
29
Analysis of changes in net funds/(debt)
1 January 2019
Cash flows
31 December 2019
£
£
£
Cash at bank and in hand
851,198
355,190
1,206,388
Borrowings excluding overdrafts
-
(1,424,909)
(1,424,909)
851,198
(1,069,719)
(218,521)
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